Tencent’s biggest shareholder to sell shares

Hong Kong CNN Business Tencent's biggest shareholder will reduce its stake in the social media and gaming giant just over a year after promising not to sell the stock for three years.

After the news, the shares in Hong Kong fell more than 4%. In Amsterdam and Johannesburg, stocks went up by 16% and 23% on Monday.

Prosus is the biggest shareholder of Tencent, with a 28.8% stake in the Amsterdam-based company.

It's not the first time Prosus has sold Tencent shares in recent years. Prosus sold a 2% stake in Tencent in April, making it the biggest block trade at the time. Block trades are usually arranged directly between institutional investors rather than on public stock exchanges. Prosus promised that it wouldn't sell any more Tencent shares for at least the next three years.

Prosus said on Monday that it would use the proceeds from the open-ended stock sale to buy back its own shares and those of Naspers.

Bob van Dijk, CEO of Prosus and Naspers, said in a statement that it will rebalance our asset base towards our fast growing non-centres.

The company said it would begin selling small numbers of Tencent shares regularly and in an orderly manner, but didn't elaborate on how many.

According to an exchange filing, Tencent said on Monday that the sale of Prosus will only represent a small percentage of the average daily trading volume in its stock.